Television

Murdoch's `Death Star' Puts Cable Industry Under Gun

May 22, 1997|By Tom Jicha, Sun-Sentinel, South Florida.

Great news. The Death Star is coming.

"Death Star" is what the cable TV industry has dubbed Rupert Murdoch's latest venture. The international tycoon, who did the supposedly impossible in creating a fourth network, recently agreed to spend $1 billion to merge his company with EchoStar, one of the providers of DBS television.

FOR THE RECORD - Additional material published May 24, 1997:Corrections and clarifications.Information in a Thursday Tempo article on Rupert Murdoch's satellite television venture with EchoStar was outdated. The deal between EchoStar and Murdoch's company that was announced in February collapsed in late April. The Tribune regrets the error.

DBS stands for Direct Broadcast Satellite. In layman's terms, it is the small dish, the one that virtually every home in America can have regardless of zoning laws and condo restrictions. The beauty of DBS is that you can get all the networks that are out there, not just those selected by a cable company primarily interested in serving its own interests. For sports fans, DBS might as well stand for Dream Broadcast Service, since it provides access to all of the NFL games and just about all of the NBA, NHL and Major League Baseball games.

The significance of EchoStar's alliance with Murdoch is that it will provide EchoStar with sufficient satellites to overcome the major shortcoming of the small dishes. It will be able to provide local stations as well as the vast array of designed-for-cable stations.

The new company promises that by the end of next year it will be able to offer 75 percent of the nation's local channels. Which markets? That has not been disclosed. Providing local channels is an expensive proposition because a precious satellite beam has to be devoted to a single region, as opposed to the entire country. EchoStar is sure to aim those signals at areas with the most potential customers.

If Murdoch makes good on his word, cable will be confronted by a meaningful competitor for the first time. This has not gone unnoticed. The day Murdoch announced the merger, stock prices of the largest cable companies plunged.

The new threat also was a hot topic at the recent National Cable Television Association convention. Ted Turner, "the man who was into cable before cable was cool," was his customary colorful self in a speech to conventioneers: "We're going to make it as tough for (Murdoch) as we possibly can. Kind of like the Russian army did with the German army."

The tactics cable will use are obvious. In order to transmit local signals, Murdoch has to get copyright dispensations from Congress. Cable already has these dispensations. Cable also has a deep war chest to lobby lawmakers to deny the same rights to DBS.

If cable succeeds in getting Congress to thwart DBS, it wouldn't be the first time deep-pocketed special interests prevailed over the public at large. Then again, cable can generally be counted upon to shoot itself in the rear. The industry's arrogance is such that TCI, the nation's largest cable company, has started eliminating or curtailing C-SPAN on many of its systems. Think this might be brought up when cable comes calling for support in Washington?

That cable is taking the new threat so seriously is good news for everyone, even those not interested in the small dish. Competition generally spurs lower prices, improved service and responsiveness to consumer desires. Granted, we are talking about cable, which has little frame of reference in any of these areas, but survival is a mighty instinct.

Turner made it clear that survival is at stake. "Either (Murdoch) is going to go hungry or we are," he warned.

Cable going hungry -- what a delicious thought. Wouldn't it be great to see cable starving, if only figuratively, and seeking help? "No problem. We'll be right over. A week from Thursday, sometime between 7 a.m. and 10 p.m. If not, definitely on Friday. Be sure there's somebody there."